Does Inflation matter?

Railene Waters, Head of Business Development

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In low inflationary environments clients often think the impact of inflation is negligible and can be ignored, but is that true? In the chart below, we show the decline in purchasing power over various time periods when CPI is at 2%, 4% and 6%.

                     Source: City Asset

In the chart below the FTSE100 is shown against CPI + 4%  the volatility of the FTSE 100 is demonstrated (in the red line)  but would you expect for the performance of the two to be so close after 22 years? CPI + mandates are challenging, as we have to consistently perform while managing volatility.

                     Source: Bloomberg

City Asset Management is a multi-award-winning specialist discretionary investment manager focusing on real returns. With outcomes-based mandates of CPI + x% depending on the client’s attitude to risk. Our real return mandates let you and your clients know what we are aiming to achieve.

Multi-asset investments
We invest across a broad range of assets through different fund managers with a strong expertise in Alternative Investments, Structured Products and Investment Trusts. Seeking returns from investments that behave differently than typical stocks and bonds provides diversification. With a multi asset portfolio, we seek to manage risk while seeking to outperform inflation.  

Investment Solutions to meet different needs
Our Solutions are designed to produce a variety of outcomes for clients as can be seen on the chart below. The risk levels increase from DT4 – DT6 for the Real range.

Real Income
A solution which is specifically designed for managing a CPI linked income of up to 4%p.a. A personal benchmark is created so performance can be tracked at reviews and used in conjunction with Advisers cash flow model plans. Realincome considers sequencing risk, pound cost ravaging and a client’s need for income flexibility and is strategically managed to maintain a sustainable return through time. Real 2/3/4/5 mandates are available on both an  MPS and Discretionary basis, visit us at www.city-asset.co.uk  for further information.

                                                                                                                                                                                    


The value of your investments can fall and you may not get back the amount invested.  Past performance is not a guide to future performance.  Please see the relevant section of our website for more detailed information and risk warnings.  You should not invest in or deal in any financial product unless you understand its nature and we recommend you seek advice Compliance Code: DH2359


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Go to the profile of City Asset Management Plc

City Asset Management Plc

City Asset Management (CAM) is a discretionary investment manager offering a more personalised and flexible service-led approach than that offered by many larger wealth managers and private banks. Established in 1988 and mainly owned by the working directors and staff. Inflation erodes your spending power. Our goal is to preserve and increase your wealth. To become wealthier your assets need to grow at a faster rate than inflation. Therefore, we target this outcome and focus on growing your portfolio at a higher rate than inflation, as measured by the Consumer Price Index (CPI).

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